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Jan 6, 2022 by |

San Francisco Whistleblower Attorney: Hospital To Pay $18.2 Million To Settle False Claims Act Allegations Of Kickbacks To Referring Physicians


Alleged Violations Of Anti-Kickback Statute And Stark Law

Improper Financial Inducements For Referrals

Physician Whistleblower Will Receive $3 Million Reward

Federal law prohibits financial inducements for referrals by physicians and other health care providers for patient services.  See Anti-Kickback Statute, 42 U.S.C. § 1320a-7(b), and Stark Law, 42 U.S.C. § 1395nn.  The aim of the statutes is to ensure that referrals are made, and services provided, based on their medical necessity and appropriateness, not their potential profitability.  When the government is paying for the services, the outlays also constitute false claims for government money under the False Claims Act (FCA), 31 U.S.C. §§ 3729 et seq.   Individuals with knowledge of the fraud are entitled to bring actions (known as “qui tams”) under the FCA for recovery of government funds and they can be rewarded if the government recovers. 31 U.S.C. § 3730(d).  The individuals bringing the qui tam cases are known as “relators.”  If you have credible information of healthcare fraud in San Francisco or elsewhere in California, call us today at (415)441-8669 and we can help. Our toll-free number is 1-888-50EVANS (888-503-8267).

Hospital Settles FCA Allegations For $18.5 Million

In a recent settlement announced by the U.S. Department of Justice,[1] a partially physician-owned hospital has agreed to pay $18.2 million to resolve allegations that it violated the False Claims Act by knowingly submitting claims to government programs that resulted from violations of the Stark Law and the Anti‑Kickback Statute.  The settlement resolves allegations that the hospital violated the Stark Law and Anti-Kickback Statute when it repurchased shares from physician-owners aged 63 or older and then resold those shares to younger physicians. The United States alleges that the hospital impermissibly took into account the volume or value of certain physicians’ referrals when it (1) selected the physicians to whom the shares would be resold and (2) determined the number of shares each physician would receive.  “Improper financial arrangements between hospitals and physicians can distort physician decision-making and drive up health care costs for everybody,” said Acting Assistant Attorney General Brian M. Boynton of the Justice Department’s Civil Division. “Patients deserve the independent and objective judgment of their health care professionals.”  One of the physicians who was an owner of the hospital blew the whistle on the alleged fraud; he will receive a $3 million reward out of the settlement.

How A Qui Tam Case Begins

Qui tam cases typically take a long time but they all begin with filing a qui tam complaint under the FCA in the federal district court where the allegedly fraudulent conduct occurred.  31 U.S.C. § 3730(b).  The complaint is filed confidentially under seal and the government has sixty days to review the allegations and decide whether to intervene.  This review period can be extended, and often times is, for a year or more as the government continues to investigate the allegations.  If the government decides to intervene, the government essentially takes over the litigation.  31 U.S.C. § 3730(c).  If the government decides not to intervene, the relator has the right to continue the litigation on his or her own.  If the relator continues the litigation alone, he or she receive a larger percentage of the amount the government eventually recovers.  31 U.S.C. § 3730(d).  The relator may also pursue claims for wrongful retaliation against the defendant if the relator was fired or demoted as a result of blowing the whistle.  31 U.S.C. § 3730(h).

Contact Us

If you have credible information of government fraud call Ingrid M. Evans at (415) 441-8669, or toll-free at 1-888-50EVANS (888-503-8267) or by email at <a href=””></a>.  In addition to FCA and CFCA whistleblower cases, Ingrid and Evans Law Firm, Inc. also handle bank fraud whistleblower cases under FIRREA/FIAFEA, commodity trading and securities fraud under the Commodities Futures Trading Commission Whistleblower Program and the Securities and Exchange Commission Whistleblower Program, and tax fraud under the Internal Revenue Service Whistleblower Program. 

[1] Evans Law Firm, Inc. was not involved in the case in any way. The qui tam case is captioned United States ex rel. Jennings v. Flower Mound Hospital Partners, LLC, et al., Civil Action No. 3-19-CV-02676-B (N.D. Tex.). 


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